Download Managed Care: Understanding Different Types, History, and Trends and more Study notes Health sciences in PDF only on Docsity! 1 Managed Care Chap. 19, PLB October 12, 2010 AHS 330 - Unit 6 - Fall 2010 1 Overview • Definitions of managed care and different forms of managed care • Types of HMOs d i d• Tren s n manage care • Problems with managed care • Court rulings involving managed care October 12, 2010 AHS 330 - Unit 6 - Fall 2010 2 Managed Care • A term used to describe a variety/spectrum of approaches used to integrate the delivery and financing of health care • In managed care, both patient utilization and provider practices are managed by an entity that has a fiduciary interest in the interactions between them – An umbrellas term for a range of organizational and reimbursement mechanisms in the U.S. delivery system October 12, 2010 AHS 330 - Unit 6 - Fall 2010 3 Employer or individual pays premium to managed care company Managed Care Organization General Managed Care Process: contracts with Providers to care for specified period of time Patient seeks care from the primary care provider when necessary (may be referred to a specialist if necessary); patient pays applicable co-payment October 12, 2010 AHS 330 - Unit 6 - Fall 2010 4 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 5 Shifts From FFS to Managed Care • Focus shift – From individual provider‐patient to comprehensive needs of a population of patients – From episodic care to holistic care – From reimbursement on a fixed fee per service to a fixed fee for all services October 12, 2010 AHS 330 - Unit 6 - Fall 2010 6 2 Why a shift towards managed care? • Risings costs • Perverse incentive of FFS • Open access to specialists • Need to better predict costs • Need for accountability • Need to increase efficiency • The societal burden of the uninsured October 12, 2010 AHS 330 - Unit 6 - Fall 2010 7 Essential Terms Associated With Managed Care • Gatekeeper—primary care physician (PCP) who must authorize all care before any care is rendered • Capitation—a set amount of money received/paid out; it is based on membership rather than on services delivered (common example is per member/per month) • Closed Panel—a managed care plan that contracts with physicians l i b i f i h h i i don an exc us ve as s or serv ces; t e p ys c ans o not treat any other patients besides those who are members of the plan. Can also refer to patients only being able to see physicians who are contracted or employed by the plan. • Open Panel—a managed care plan that contracts with private physicians to deliver care in their own offices; the physicians may see other patients that are not in the plan. Can also refer to patients being permitted to see physicians who are not contracted or employed by the plan October 12, 2010 AHS 330 - Unit 6 - Fall 2010 8 Essential Terms Associated With Managed Care • MCO – Managed Care Organization • HMO – Health Maintenance Organization • POS – Point of Service • PPO Preferred Provider Organization – • HSA – Health Savings Account • HDHP – High Deductible Health Plan • Managed FFS – Indemnity plan with some managed care components October 12, 2010 AHS 330 - Unit 6 - Fall 2010 9 Managed Care: HMO, POS, PPO • Integrates financing and delivery • Set of comprehensive health services • Selected providers/Explicit provider selection d dstan ar s • Formal Quality Assurance and Utilization Review programs • Financial incentives for member to use providers associated with the plans October 12, 2010 AHS 330 - Unit 6 - Fall 2010 10 History of Managed Care • 1917: Western Clinic in Tacoma, WA – lumber industry • 1929: Dr. Kimball – The Baylor Plan (first Blues logo) • 1929: Dr. Shadid ‐ Rural Farmers’ Cooperative Health Plan, Elk City, OK • 1929: Ross‐Loos Medical Group for L.A. Department of Water and Power • 1933: Dr. Garfield – prepaid plan for Contractor’s Hospital and clinic for aqueduct workers • 1937: Group Health Association in Washington, DC – Federal Home Loan Bank • 1938: Henry J. Kaiser recruits Garfield to establish hospital and clinic for Grand Coulee Dam workers (Washington State): birth of Kaiser October 12, 2010 AHS 330 - Unit 6 - Fall 2010 11 History of Managed Care • 1939: Blue Shield adopted for participating prepaid practices • 1942: Kaiser convinces Garfield to expand to Kaiser managed shipyards and mills. • 1945: Group Health Cooperative of Puget Sound • 1945: Permanente Health Plan open to public in CA in addition to Kaiser employees • 1941: AMA convicted of anti‐trust violations in Group Health Association case, SC upheld ruling in 1947. • 1954: San Joaquin Medical Care Foundation (first IPA) • 1970: Paul Ellwood coins term “Health Maintenance Organization” • 1973: HMO ACT October 12, 2010 AHS 330 - Unit 6 - Fall 2010 12 5 Independent Practice Association (IPA) • Individual physicians contract to provide care to enrolled members • Physicians participating in IPAs retain their right to treat non HMO patients on a FFS basis ‐ • This is an open panel HMO October 12, 2010 AHS 330 - Unit 6 - Fall 2010 25 Network Model • HMO contracts with multiple physician groups to deliver health care to members; generally limited to large single and multi‐specialty groups – MDs are not employees or contractors of the HMO – Typically an open panel model October 12, 2010 AHS 330 - Unit 6 - Fall 2010 26 •A POS is a mix between an HMO and a PPO. •You have a primary care doctor and you get October 12, 2010 AHS 330 - Unit 6 - Fall 2010 27 most of your health care from an HMO network. HMO Membership Takes off in the 1990s October 12, 2010 AHS 330 - Unit 6 - Fall 2010 28 Other Forms of Managed Care • Preferred Provider Organizations • Consumer Directed Health Plan October 12, 2010 AHS 330 - Unit 6 - Fall 2010 29 Preferred Provider Organizations (PPO): • This type of plan is not an HMO, but is a form of managed care • A plan that contracts with independent providers to provide services at a discount; the panel is limited in size and usually has some type of utilization review system associated with it; • Identify “Preferred” Hospitals & Physicians • Charge Consumers More for Using Outside Providers • Contract with providers at a discounted rate in exchange for a guaranteed patient flow and timely payment of bills • How does a PPO differ from an HMO? – Providers are still paid on a fee‐for‐service basis (discounted), so the provider is not at financial risk October 12, 2010 AHS 330 - Unit 6 - Fall 2010 30 6 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 31 What is a consumer‐directed health plan (CDHP)? • Core concept is to increase consumer awareness about health care costs and provide incentives for consumers to consider costs when making health care decisions • Health plan with a high deductible accompanied by a consumer‐ ll d i f h l hcontro e sav ngs account or ea t care – High deductible health plan (HDHP) typically has deductible of at least $1000 for single coverage, but can be much higher – Two primary types of health care savings accounts • Health Savings Accounts (HSAs) • Health Reimbursement Arrangements (HRAs) Why consumer‐directed health plans? • Continuing rise in health care costs • Intended to make consumers more cost‐conscious and use less health care L f t i i $3,383 $4,024 $4,000 Average Annual Premium for Single Beneficiary, by Year – ower u ure ncreases n premiums – Higher deductibles – Lower premiums mean lower short‐term costs for employers – Potential high out‐of‐pocket spending for consumers $2,424 $0 $2,000 2000 2003 2005Year Source: Kaiser/HRET Employee Health Benefits Surveys 2000-2005. Principles of CDHPs • Departure from previous health care financing principles • Consumers have greater responsibility for cost containment • Emphasize individual responsibility and ownership High Deductible Health Plans • Consumer responsible for costs up to specified deductible level – can pay out of pocket or with funds from savings account • Plan begins to pay for services after consumer has reached deductible • Many plans require cost sharing after deductible is met, up to out‐of‐pocket max • Plans may pay for “preventive” benefits (i.e. annual physical, mammogram, pap test) before deductible is met Consumer‐Directed Savings Accounts • Account to pay for expenses subject to the deductible or not covered by the plan – Employers and/or individuals can contribute to the account – Employer contributions typically much less than the deductible – Individuals can also contribute to accounts ‐ tax preferred – Unspent funds in the account can be rolled over for future health care needs – Provides consumers with incentives to spend account wisely 7 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 37 Growth in Consumer Directed Health Plans October 12, 2010 AHS 330 - Unit 6 - Fall 2010 38 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 39 Current Coverage Figures in Managed Care, 2009 • Enrollment remains highest in PPOs, with 3 in 5 covered workers enrolled in this plan type, followed by HMOs, POS plans, HDHP/SOs, and conventional plans. • ‐‐ 60% PPOs • 20% HMOs‐‐ • ‐‐ 10% POS plans • ‐‐ 8% HDHP/SOs • ‐‐ 1% conventional plans • The distribution of health plan enrollment in 2009 did not change from last year October 12, 2010 AHS 330 - Unit 6 - Fall 2010 40 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 41 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 42 10 Issues in Managed Care • Adverse/favorable selection • Gag rules • Physician autonomy • Turnover • Satisfaction • Quality of care • Regulation • Cost containment October 12, 2010 AHS 330 - Unit 6 - Fall 2010 55 Adverse vs. Favorable Selection • Adverse Selection – Plan attracts members who are sicker than the general population because of the low out-of-pocket costs and generosity of benefits (bad for MCO) • Favorable Selection – “Cherry Picking” or “Cream Skimming” Plan actively seeks out healthy enrollees who will use fewer services (good for MCO) October 12, 2010 AHS 330 - Unit 6 - Fall 2010 56 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 57 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 58 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 59 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 60 11 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 61 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 62 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 63 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 64 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 65 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 66 12 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 67 DENIED COVERAGE: Doctors Reported that Health Plans Denied Their Requests For These Services: Source: Kaiser Family Foundation July 1999 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 68 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 69 Confidence in HMOS sinks, but Congress is still offering placebos States taking lead As Congress dawdles, states have moved aggressively to pass key protections for patients in health plans covered by state regulations. A sampling: OUR VIEW Vote on patient rights nears, but it won’t match state reforms October 12, 2010 AHS 330 - Unit 6 - Fall 2010 70 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 71 October 12, 2010 AHS 330 - Unit 6 - Fall 2010 72